November 21, 2006 > Investors expect quiet holiday week on Wall Street

by Tim Paradis

NEW YORK (AP), Nov 17 _ Though investors' thoughts might drift to turkey and football in the coming week, such diversions are unlikely to crowd out questions about the sustainability of the recent run-up in stocks _ and whether Wall Street is likely to enjoy its usual yearend rally.

Not surprisingly, the week is expected to be light for both economic and earnings data. However, some investors will be looking for signs of how well consumer spending might hold up as the holiday season has its official start.

Last week, the Dow rose 1.93 percent, while the S&P gained 1.47 percent and the Nasdaq added 2.35 percent, as concerns about inflation eased.

The coming week brings so-called Black Friday, the day following Thanksgiving when discount-seeking shoppers pour into stores at what seems like an earlier hour each year. Investors and retailers closely examine cash register receipts from the day in hopes of determining the strength of consumer spending, which accounts for two-thirds of economic growth.

Some investors have maintained concerns about whether a slowing housing market and an attendant drop in home values will cause consumers to spend less this year. On Friday, the Commerce Department reported that housing construction fell to its lowest level in more than six years.

Some of the notable earnings reports in the coming week are from retailers, including Lowe's Cos. and Nordstrom Inc.

ECONOMIC DATA

On Monday, the Conference Board expects to release its index of leading indicators, an economic forecasting gauge. The index, however, comprises previously reported economic figures so it generally doesn't have significant pull on the market.

Wednesday brings the weekly data from the Labor Department on initial jobless claims. Last week, claims fell to their lowest level in a month. More broadly, in October, the nation's unemployment level fell to its lowest level in five years. A tight labor market has some market watchers concerned about a rise in wages that could squeeze profits and force companies to push through inflationary price increases.

The Federal Reserve remains concerned about inflation and isn't likely to consider lowering short-term interest rates until it determines the threat of inflation has been extinguished. The central bank has left rates unchanged at its last three meetings, following a string of 17 straight increases over two years.

Weekly crude inventories figures are due from the Energy Department on Wednesday. Oil settled at its lowest level in 17 months Friday amid concerns that production cuts wouldn't make up for lower demand.

Wednesday also brings a revision to the University of Michigan's November consumer sentiment survey.

EARNINGS

Monday is the biggest day in earnings reports. Campbell Soup Co. is expected to report a fiscal first-quarter profit of 61 cents per share. The stock, which has traded between $28.88 and $38.49 in the past 52 weeks closed Friday at $37.55.

The same day, home-improvement retailer Lowe's Cos. is set to report a third-quarter profit of 43 cents per share. Investors have been trying to determine whether a slowdown in the housing market would hurt demand for remodeling projects. Lowe's has traded between $26.15 and $34.85 in the past 52 weeks and closed Friday at $30.48.

Also Monday, Medtronic Inc. is expected to report earnings of 56 cents per share for its fiscal second quarter. The stock, which closed Friday at $48.71, traded between $42.37 and $59.87.

Finally, high-end department store chain Nordstrom Inc. plans to release third-quarter results Monday and is seen on Wall Street as reporting a profit of 51 cents per share. Department store chains have seen a bit of a rebound in sales and higher-price retailers have generally fared better than some of the lower-price units. Nordstrom's stock closed Friday at $48.08, having traded between $31.77 and $49.52 over the last 52 weeks.

On Wednesday, Hormel Foods Corp. is expected to turn in a profit of 62 cents per share for its fiscal fourth quarter. The meat processor closed Friday at $36.79 and has traded between $31.73 and $38.41 in the past 52 weeks.